United Nations Children's Fund (UNICEF)

January 17, 2020 DA ITAD BIR RULING NO. 001-20 Section 106 (A) (2) (b), 1997 NIRC, as amended; Section 9, Revenue Regulations No. 25-2003; Paragraph A, Article VI, PH-UNICEF Agreement; BIR Ruling No. ITAD-014-14 United Nations Children's Fund (UNICEF) 14th Floor North Tower, Rockwell Business Center Sheridan Sheridan Street corner United Street, Highway Hills 1550 Mandaluyong City Attention: AAA _______________ Gentlemen : This refers to your Note No. MA/DFA#19-0495 dated November 29, 2019 indorsed to this Office by the Department of Finance and the Department of Foreign Affairs, requesting exemption from value-added (VAT) and ad valorem taxes on the local purchase of one (1) unit of motor vehicle, for the official use of the United Nations Children's Fund (UNICEF), specifically described as follows: HTcADC Type of Use: Official Make: Toyota Camry 2.5V AT (WPG4002) Model Year: 2020 Color: White Frame Number: MR2BF3HK1K4007557 Engine Number: 2AR2293216 In reply, please be informed that Section 106 (A) (2) (b) of the National Internal Revenue Code (NIRC) of 1997, as amended by Republic Act No. 10963, otherwise known as the Tax Reform for Acceleration and Inclusion (TRAIN) Act, provides, viz. : "SEC. 106. Value-Added Tax on Sale of Goods or Properties. (A) Rate and Base of Tax. There shall be levied, assessed and collected on every sale, barter or exchange of goods or properties, a value-added tax equivalent to twelve percent (12%) of the gross selling price or gross value in money of the goods or properties sold, bartered or exchanged, such tax to be paid by the seller or transferor: xxx xxx xxx (2) The following sales by VAT-registered persons shall be subject to zero percent (0%) rate: xxx xxx xxx (b) Sales to persons or entities whose exemption under special laws or international agreements to which the Philippines is a signatory effectively subjects such sales to zero rate." Relative thereto, paragraph (A), Article VI of the Agreement between the United Nations Children's Fund and the Government of the Republic of the Philippines 1 (PH-UNICEF Agreement) provides that UNICEF is exempt from all taxes imposed by the government, its political subdivisions and any public authority in the Philippines, thus: " Article VI IMMUNITY FROM TAXATION xxx xxx xxx (A) The Fund, its assets, property, income and its operations and transactions of whatever nature shall be immune from all taxes, fees, tolls, or duties imposed by the government or by any political sub-division thereof or by any other public authority in the Philippines. The Fund shall also be immune from liability for the collection of payment of any tax, fee, toll, or duty imposed by the Government or by any political sub-division thereof or by any other public authority. x x x" Hence, this Office is of the opinion as it hereby rules that the sale of one (1) unit of 2020 Toyota Camry 2.5V AT (WPG4002) by the VAT-registered local car dealer for the official use of UNICEF, an exempt entity pursuant to the PH-UNICEF Agreement, shall be subject to VAT at zero-percent (0%) rate pursuant to Section 106 (A) (2) (b) of the NIRC, as amended. Such sale is likewise exempt from ad valorem tax pursuant to the UN Convention, as implemented under Section 9 of Revenue Regulations No. 25-2003. CAIHTE This ruling is issued on the basis of the facts as represented. However, if upon investigation it shall be disclosed that the actual facts are different, then this ruling shall be without force and effect insofar as the herein parties are concerned. Very truly yours, Commissioner of Internal Revenue By: (SGD.) LARRY M. BARCELO OIC-Assistant Commissioner Legal Service Footnotes 1. Signed on November 20, 1948.